Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

Lloyds to be 65% taxpayer owned

09 March 2009 / by Rebecca Sargent

Lloyds Banking Group will soon be 65 per cent owned by the taxpayer it emerged over the weekend following talks with the Treasury.

The deal has been struck up in an attempt to boost consumer confidence in the bank and to encourage the group to lend.

In addition to an increased Government share in the group, up from 43 per cent, the arrangement will see the taxpayer insure £260billion in toxic debts, as it participates in the Asset Protection Scheme.

The Treasury scheme has so far agreed to insure £325billion of toxic assets from Royal Bank of Scotland, bringing the total amount insured to almost £600billion. Lloyds Banking Group predicts that 83 per cent of the toxic assets to be insured will come from HBOS, which it bailed out earlier this year.

In return for its participation in the scheme, Lloyds has agreed a fee of £15.6billion. The bank has also pledged to increase its lending by £28billion over the next two years.

The announcement mirrors the agreement with RBS, which has agreed to increase lending by £25billion. Lloyds will boost its mortgage lending by £3billion and its business lending by £11billion this year, with a further £14billion pledged for 2010.

Commenting on Lloyds' participation in the scheme, group chief executive Eric Daniels said: "Participating in the Government's Asset Protection Scheme substantially reduces the risk profile of the Group's balance sheet.

"Our significantly enhanced capital position will ensure that the Group can weather the severest economic downturns and emerge strongly when the economy recovers. We believe that this is an appropriate deal for our shareholders."

The measures have been met with criticism from shadow chancellor George Osborne, who said: "For the size of the British economy we have now spent more than any other country on bailing out our banks and there's precious little to show for it. The taxpayer deserves better."

The FTSE 100 fell this morning upon the weekend's news, commenting Joshua Raymond, market strategist at City Index said: "Lloyds will remain in focus for sometime. It is not full nationalisation yet but investors fear the government are merely moving their chess pieces into position."